In a recent study conducted by Coalition Against Insurance Fraud, it was stated that 60 percent of insurers said they have seen an increase in fraud over the last three years. So what can agencies do to detect the fraudulent activity earlier? Use new technology!
Fraud Fighting Tech is Paying Off
“Insurer investments in fraud-fighting tech are paying bigger dividends, and faster,” explained Dennis Jay, the Coalition’s executive director. “Insurers continue gaining confidence that tech is a nucleus of their efforts to stem surging fraud crimes.”
Agencies are able to detect fraud faster and more reliable than ever with the use of technology. There are a few ways agencies are using new software and equipment to do this.
Automation: Red Flags
This is easily the most popular technology that is being used to detect activity. 90% of agencies that stated using anti-fraud technology selected red flags for their main method of detection. This is an increase of 26 percent from 2014.
Red flags can be used in a number of ways to detect a number of different things but ultimately you are in control of what you want to catch and how you can be notified. Agencies have had and are continuing to have great success with this system. Who doesn't want to have technology work for them while they sleep?
Data, Data, Data
Data can be overwhelming but what the variety of sources continuing to increase agencies are able to filter this information to play in their favor. Social media has been a popular topic when it comes to detecting insurance fraud. Using a combination of internal records, public records, and social media that can be included in their technology systems in order to flag questionable claims. The number of insurers in the survey who said they utilize predictive modeling increased to more than 50 percent.
Link analysis and data mining also seemed to increased in the study. With over 2/3 of insurers saying they use these tools. Industry fraud alerts are becoming more valuable that ever especially because fraud tends to crossover into more than just the insurance world.
Pros and Cons
There are many positives to using technology to detect fraud. Being able to detect activity earlier than human based systems. Accurate information pertaining to the fraudulent activity. Having a detection system working for you 24/7. Overall, it is just easier when used properly and can save your business time and money.
Limited IT resources affect its effectiveness for insurers, especially those with smaller budgets or less in-house expertise available. While companies are aggressive in using technology for marketing, legal and underwriting aspects of claims, in many cases budgets are not adequate to hire outside services or purchase additional technologies. Almost one-third of the respondents indicated they were planning to increase their budgets in 2017, but 52 percent weren’t adjusting their budgets.
At Omega Computer Services we work with your agency to craft a budget that works for you. Doing whatever we can to make sure your agency has the technology it needs to be successful!
For more information on insurance fraud, check out our Insurance Technology Pillar Page